Suppose government finds it can increase the equilibrium real GDP $45 billion by increasing government purchases by $18 billion. On the basis of this information, we can say that the:

The interest-rate effect

a. depends on the idea that increases in interest rates decrease the quantity of goods and services demanded. b. depends on the idea that increases in interest rates decrease the quantity of goods and services supplied. c. is responsible for the downward slope of the money-demand curve. d. is the least important reason, in the case of the United States, for the downward slope of the aggregate-demand curve.

If the government spending increases without an equal increase in taxes, the government must borrow funds in the financial markets

Indicate whether the statement is true or false